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EXHIBIT 6

ADDITIONAL BRANCHES OF RTC CONSERVATORSHIP INSTITUTIONS

IN PRIMARILY MINORITY NEIGHBORHOODS

[blocks in formation]

* Branch deposit data as of 8/31/93.

** Minority Owned. Transaction pending.

Note: Minority neighborhood locations are defined as those where 50% or more of the population in the zip code is minority.

VERBAL QUESTION #3

VERBAL QUESTION FROM CHAIRMAN FLAKE

Verbal 3:

An explanation of how the RTC evaluates the performance of minority SAMDA contractors. Is this process subjective or objective?

ANSWER VERBAL 3:

The process described below applies to each SAMDA asset management contractor, irrespective of whether or not it is a minority contractor.

On November 28, 1990, the RTC issued a directive entitled "Oversight Manager Program" by which a comprehensive program was established to monitor the activities and performance of asset management contractors (AMC's), predominantly contractors assigned assets under the Standard Asset Management and Disposition Agreement (SAMDA). The Oversight Manager (OM) Program utilizes Field Office staff to manage and oversee the SAMDA contractors on a contract-specific basis. The administration of the SAMDA contractor's compliance with the terms of the SAMDA agreement is the joint responsibility of the Oversight Manager and the Contracts Administration Specialist within the RTC's Office of Contract Operations.

The OM Program was designed to ensure that AMC's are effectively carrying out their contractual obligations in conformance with RTC policies and procedures, particularly those set forth in the RTC's Asset Management and Disposition Manual. The monitoring responsibilities of the OM include the review of documents submitted by the contractor such as Asset Management and Disposition Plans and Business Plans, and reports tracking actual recoveries as compared to projected recoveries for each asset. The OM conducts a series of formalized site reviews consisting of quarterly or semiannual contract review meetings and annual site visitations to discuss various performance issues and remedy any performance issues noted by the OM and other oversight staff.

In a corollary directive issued April 16, 1991, the RTC established uniform criteria to measure and rate the performance of AMC's. The performance ratings were designed to objectively evaluate and compare the projections outlined by the SAMDA contractors in the Asset Management and Disposition Plans with actual results obtained, and to assess overall compliance with SAMDA contract terms and conditions. These performance criteria and related pertinent information comprise an adequate basis to assess the SAMDA's performance in several key areas, and the comprehensive performance ratings provide a uniform standard to communicate the evaluation to each contractor.

The performance criteria consists of "primary" measures dealing with qualifiable results achieved by the contractors in the areas of cash collections, expenses, real estate sales, and distressed loan collections. "Secondary" factors, such as compliance with RTC asset management and disposition procedures and outreach efforts under the Minority and Women-Owned Business Program (MWOB) when soliciting subcontractors, are also considered in the overall assessment.

The performance evaluation, while predominantly relying on objective and quantitative criteria, also permits the inclusion of certain subjective considerations when developing the comprehensive rating. These subjective criteria allow for consideration of mitigating circumstances such as extraordinary litigation or environmental issues which could skew performance results by the SAMDA contractor.

On January 21, 1992, a revision of the RTC Asset Management and Disposition Manual was issued which consolidated the various requirements of the OM Program and provided a mechanism, the Asset Management Contractor Performance Visitation Checklist, through which a thorough assessment of performance and compliance with RTC policies, procedures and directives could be undertaken. The checklist was developed to represent each functional area of the RTC in order to review the SAMDA contractor's progress and performance comprehensively. Thus, in addition to the OM's review of quantitative factors such as collections, expenditures, and fee calculations, areas such as Affordable Housing, MWOB, appraisals, and subcontracting are also monitored by the appropriate RTC staff in order to more fully evaluate and determine contractor performance.

The Office of SAMDA Program Management has recently revised the Contractor Visitation Checklist to more appropriately reflect and emphasize certain critical performance areas. These areas include oversight and supervision by the SAMDA contractor of technical subcontractors such as

property managers and real estate brokers as well as systems maintenance issues related to ensuring ongoing data quality and integrity.

The classification of review factors into "primary" and "secondary" categories was eliminated and each of the six substantive performance areas are now equally weighted. This modification should help dilute the impact of the more subjective criteria in the overall process. The revised checklist will be issued and is expected to be in use by OM staff shortly.

The SAMDA program, as well as all other RTC functions and activities, is winding down during 1994. The vast majority of SAMDA contracts are scheduled to expire in this calendar year. However, Field Offices may require the services of selected contractors in order to efficiently and effectively downsize operations. On November 4, 1993, the SAMDA program issued guidelines for extending SAMDA/SAMA contracts (SAMA contracts entail asset management only, with no disposition activities) if demonstrated Field Office needs warrant.

The SAMDA extension program represents a collective and collaborative assessment from staff in the areas of SAMDA, Division of Legal Services, the Office of Contract Policy and Major Dispute Resolution, Division of Minority and Women's Programs and other applicable programs and offices. The selection process is intended to reach a consensus with all participants in the application of both qualitative and quantitative technical criteria. The extension program's broad objectives are to promote asset management continuity while minimizing the costs associated with the assignment of the remaining asset portfolios.

The technical criteria are weighted in terms of "most important", "more important" and "important". Among the factors deemed "most important" is the MWOB criterion, wherein the contractor's performance in meeting the SAMDA program's goal that thirty percent (30 percent) of total dollars funded under mandatory subcontracts be awarded to minority and womenowned firms, is given priority consideration. The contractor's overall participation in MWOB outreach efforts is also a related factor in this category.

Finally, it should be noted that throughout the history of the SAMDA program, the emphasis of both the OM Program and the AMC performance criteria and rating process is to provide timely and appropriate feedback to all the AMC's engaged in liquidating RTC-controlled assets. The OM Program is intended not only to enable performance deficiencies to be noted and addressed in a timely manner, but also to facilitate ongoing technical assistance by RTC staff in working with the contractor to remedy problems

and issues. It has been and continues to be in the RTC's best interest that all contractors perform to the optimum degree possible.

The Office of SAMDA Program Management will continue to work closely with the remaining AMC's during this year of phasing out RTC programs and functions. Indeed, the standards and criteria developed early in the RTC's existence, and subsequently revised, play an even more significant role as the RTC winds down its mission.

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